Research concerning the autonomy of subsidiaries has been concentrated on the possession
of decision-making rights. Building on the definitional and empirical argumentation, we
claim that so understood autonomy has a prospective character, is not equal to the
implementation of actual actions (or lack of thereof) and neglects the issue of the scope of
potential actions. This paper aims to fill in the current literature gap by offering a holistic
stance in which we assert that subsidiaries can be meaningfully differentiated according to
their levels of autonomy and corresponding actions. We base this argumentation on the
findings of real option theory and competitive dynamics perspective, develop a typology
specific to a subsidiary’s autonomy activity status (the position of a subsidiary in terms of its
autonomy level confronted with the extent of actions taken in a corresponding area). We
evaluate empirical validity of this approach on a sample of 377 foreign subsidiaries located
in CEE countries. Our results (multinomial logit models) show that the proposed typology
has the power to define internally consistent positions which are differentiated along four
variables representing widely understood interdependencies within an MNE (sales
dependence, sourcing dependence, technological dependence of the foreign investor upon
the subsidiary and technological dependence of the subsidiary upon the MNE).

This paper develops a conceptual framework on the strategic development of subsidiaries and the direct employment of skilled labour. The framework is based on autonomy, and intra and inters organizational relationships. The conceptual model outlines the conditions that are likely to lead to too much, or too little, autonomy and intra and inter organizational relationships. This model is then used to develop propositions on the links between autonomy and intra and inter organizational relationships and direct employment of skilled labour.

When building up competences, a subsidiary of a multinational corporation (MNC) may rely on
external knowledge sources like customers, suppliers, competitors or local science centers. Internal
sourcing is also available through knowledge offered by headquarters or other affiliates. The
question is whether the two kinds of sources are mutual exclusive. A dilemma or organizational
trade-off is foreseeable, since the more the subsidiary adapts its knowledge creation processes to
host country institutions, the less it will be able to utilize internal knowledge sources due to the
institutional distance between the external and internal networks. However, newer organizational
forms, like the concept of the "differentiated MNC", imply a relatively smooth flow of knowledge
inside the MNC, indicating that we should not expect an organizational trade-off between internal
and external sources. The subsidiary’s ability to build on two knowledge networks depends on its
scale of resources, absorptive capacity and the role it plays in the corporation.
The relationship between internal and external sourcing is tested using a unique dataset that covers
more than 2,000 subsidiaries located in seven different European countries (the Centre of Excellence
Project). In fact, the results show that, to a certain extent, there is no dilemma between a
subsidiary’s knowledge development based on both internal, and external knowledge sources.
However, the results also show a bell-shaped relationship between the use of internal and external
sources, where a heavily embedded use of internal sources excludes the use of external sources.
Keywords: Internal sourcing, External sourcing, Institutional Isomorphism and Subsidiary
knowledge.

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Previous discussions of knowledge transfers within multinational corporations (MNC’s) tended to focus on the process as an isolated phenomenon, and the factors that impede these transfers. Less attention has been given to the identification and personal codification processes of knowledge prior to transfer. A model for understanding how knowledge is retrieved in MNC’s is proposed in this paper, with a specific focus on the retrieval of information located in information technology (IT) systems. The model is derived from (1) a critical examination of knowledge management theory, and (2) the empirical research results gathered from Computer Sciences Corporation (CSC). Our survey of CSC reveals that the company is able to overcome the problem of identifying valuable knowledge in a geographical dispersed organization by establishing virtual communities of practice via its portal system. Virtual communities of practice are seen as a combination of the codification and the personalization strategies in this paper.

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The relationship between multinational enterprises’ (MNE) headquarters and their subsidiaries has been of considerable interest to international business scholars (e.g., Dörrenbächer and Geppert, 2009). Although a subsidiary is an integral part of an MNE, its interests do not necessarily converge with those of headquarters. Many scholars note that relationships between headquarters and subsidiaries are characterized by the simultaneous presence of cooperation and competition (e.g., Bouquet and Birkinshaw, 2008; Otterbeck, 1981). On the one hand, the subsidiary and its managers are dependent on headquarters’ resources to fulfill its mandate. On the other hand, the subsidiary and its managers have their own particular goals, which may or may not coincide with the goals of headquarters and its managers. Subsidiary managers may also seek to develop the unit’s own sense of identity, which may be at variance with that of the MNE (e.g., Mudambi and Navarra, 2004). The potential for goal and identity conflict between headquarters and subsidiaries leads to the emergence of a mixed-motive relationship between the two units and their managers. A mixed-motive relationship generates conflict, but the mere existence of conflict is not necessarily detrimental to the relationship (Rahim and Bonoma, 1979). However, the emergence of a prolonged conflict and/or its ineffective management may create a dysfunctional relationship between the headquarters and the subsidiary.

The paper investigates the consequences of interactions between autonomy, intra and inter-organizational networks for the performance of subsidiaries. Furthermore, the paper analyzes the impact of changes in autonomy and network relationships rather than investigating levels. This introduces the concept of adjustment of subsidiary strategies to changes in the international and host country business environment. Based on a survey of 350 foreign owned subsidiaries located in the UK, Germany and Denmark, we find evidence that increases in the inter-organizational network relationships of subsidiaries lead to increased subsidiary performance. Further, increased subsidiary autonomy positively affects subsidiary inter-organizational network relationships, and to some degree negatively affects intra-organizational network relationships. Finally, overlapping effects between inter- and intra-organizational network relationships are found.

In this paper, we investigate post-acquisition integration of acquired firms and subsequent developments in new subsidiary strategic responsibilities in value-chain activities. Using comparative case study methodology, we illustrate the forms, degrees and evolution of strategic responsibilities using in-depth analysis of six acquisitions from the Danish brewery, Carlsberg. The analysis reveals that the initial mandates at the time of acquisition were designed based on new subsidiaries’ core competencies and resources, and Carlsberg’s acquisition motives. Yet, the mandates did not remain static. Over time, some subsidiaries gained new value chain mandates or they substantially increased their scale in terms of production capacities or the markets in which they operated. From the practical point of view, this implies managers of the acquiring firm must pay close attention to the form and extent of integration if the acquisition is fulfill its potential.

This paper analyses the moves global brewery companies undertake towards the distribution of decision making authority in their multinational organization and the likelihood of newly acquired subsidiaries to influence these moves. In this consumer goods industry, brands are suggested to be the primary subsidiary specific resource to influence these distribution processes. Empirically this paper explores three European acquisitions of the Dutch brewery corporation Heineken in Switzerland, Slovakia, and France. We explore whether differing brand value (regional/international, standard/premium) has had an impact on the subsidiaries‟ ability to maintain a certain degree of decision making authority after the take-over. The results of our case studies show, however, that the ownership of valuable brands may not be considered as a critical resource for subsidiaries here.